On 9 December 2021, AG CAMPOS SÁNCHEZ-BORDONA provided an AG opinion about case C‑570/20
Article in the EU VAT Directive
Article 273
Member States may impose other obligations which they deem necessary to ensure the correct collection of VAT and to prevent evasion, subject to the
requirement of equal treatment as between domestic transactions and transactions carried out between Member States by taxable persons and provided that such obligations do not, in trade between Member States, give rise to formalities connected with the crossing of frontiers.
Facts
BV has exercised the profession of accountant until June 14, 2011. Following audits over the years 2009-2011, the tax authorities filed a complaint for committing accounting irregularities and fraud in income tax and VAT. The criminal court has sentenced BV to twelve months in prison, mainly because between 01-01-2010 and 14-06-2011 he had fraudulently withdrawn transactions from the VAT determination and thus fully or partially from the VAT payment. BV has applied for an acquittal before the Court of Appeal and argues that his conviction is in breach of the ne bis in idem principle guaranteed by Article 50 of the Charter. For the same facts, additional recovery proceedings have already been initiated against him personally, which has given rise to tax fines of 40% of the tax avoided. According to BV, the overall severity of the penal system is disproportionate. By judgment of 13-02-2019, the Court of Appeal ruled out the application of the ne-bis-in-idem rule because:
– Article 1741 of the General Tax Code provides for the possibility of cumulating criminal and tax sanctions after criminal proceedings and an independent administrative procedure, each having a different object and purpose;
– this exclusion is compatible with Article 50 of the Charter, as the Constitutional Council has defined its scope as follows: (i) applies only to the most serious cases of fraudulent concealment of amounts subject to tax; (ii) in accordance with the principle of proportionality, the aggregate amount of any penalties imposed must not exceed the amount of the most severe penalty.
The Court of Appeal upheld the verdict in so far as it concerns BV’s conviction and sentenced him to eighteen months’ imprisonment. BV lodged an appeal in cassation with the referring court.
Consideration:
In the first place, according to the Court, the ne bis in idem principle can be restricted only if it is necessary and the national legislation to that end must contain “clear and precise rules, so that the individual can foresee for which acts and omissions a such cumulation of prosecution measures and sanctions is possible ”(C-524/15). Second, the French legislation on the one hand limits criminal prosecution to offenses of a certain seriousness, for which the national legislature, in particular, in addition to a fine, has also provided for imprisonment. On the other hand, the possibility of cumulating sanctions is limited because the highest amount of one of the sanctions imposed cannot be exceeded. However, this rule only applies to sanctions of a similar nature, namely financial sanctions. The correct application of EU law is not so obvious that there can be no reasonable doubt as to how the questions raised should be resolved.
Source Minbuza.nl
Questions
1) Is the requirement of the clarity and the foreseeability of the circumstances in which concealments in returns relating to VAT payable may be the subject of a
duplication of proceedings and penalties of a criminal nature satisfied by national rules such as those described above?
2) Is the requirement of the necessity and the proportionality of the duplication of such penalties satisfied by national rules such as those described above?
AG Opinion
In the light of the foregoing considerations, I suggest that the Court of Justice give the following reply to the Cour de cassation (Court of Cassation, France):
Article 50 of the Charter of Fundamental Rights of the European Union is to be interpreted as meaning that:
– It does not preclude national legislation which permits the duplication of administrative and criminal proceedings and penalties in situations defined on the basis of clear and precise criteria that are laid down by law and properly defined by case-law.
– It precludes national legislation which does not make it possible to ensure the required proportionality between the seriousness of the offence, on the one hand, and the severity of all the combined penalties, on the other, whether they be financial administrative penalties of a substantively criminal nature or prison sentences.
Source
Similar ECJ cases
Menci, C-524/15
